Investing in a new car is an expensive affair. On the other hand, being cost-effective and easily accessible, second-hand cars are stirring the pre-owned car market. Moreover, the availability of a used car loan adds to the pivotal demand for a second-hand cars.In this regard, borrowers likely to opt for a second-hand car financing option must thoroughly understand the application procedure and other intricacies to make the borrowing worthwhile.
Know 5 easy steps to apply for a used car loan while buying a second-hand car
Borrowers willing to avail of a second-hand car loan can follow these five important steps:
Step 1: Choose the right seller
You can reach out either directly to the owner or a second-hand car dealer to buy a used car. Individuals buying a car directly from a car owner must ensure that documents are in place. On the other hand, a reseller or car dealer sorts out the documents before handing over the car, thus helping one avail the loan principle from the lender.
Step 2: Plan and manage budget
Mapping out the budget is perhaps one of the significant steps involved while availing of a pre owned car loan. Borrowers need to evaluate a suitable loan amount to help them manage expenses associated with purchasing the car. Therefore, it is wise to choose a loan quantum that won’t affect the financial health of borrowers.
Step 3: Evaluate the car’s condition and age
After planning the budget, borrowers need to check the condition and age of the second-hand car. Individuals must purchase a second-hand car only if the car is in proper condition and requires minimum maintenance. Buying a car with recurring issues adds to an individual’s extra expense and burden. Before approving the used car loan application, the lender also considers the car’s age.
Step 4: Selecting the right lender
Before availing of a second-hand car loan, it is imperative to choose the right lender. Borrowers must compare different lenders and settle for the one offering the lowest personal loan interest rate. Moreover, one should also have a clear idea of the lender’s eligibility criteria, terms and conditions. Failing to meet eligibility criteria will lead to the rejection of the loan application.
Step 5: Submit necessary documents
Borrowers must submit the relevant personal loan documents for a successful loan application. Here is the list of documents that one needs to provide to avail of a used car loan:
- Proof of identity
- Residential address proof
- Salary slips for the last three months
- Bank account statement for the last six months
- Income tax return
- Car registration certificate
Although an old car loan comes with its own features and helps one get financial back up while buying a car, borrowers might find the sanctioned loan amount inadequate to cover the entire expenditure.
Moreover, a long-winded process is involved in transferring the previous owner’s car insurance policy and registration certificate. However, if borrowers find these intricacies of a used car loan tedious, they can consider a convenient alternative – a personal loan.
A personal loan is a versatile finance option that helps borrowers fund varied financial requirements and mitigate financial burdens. However, borrowers wondering how to get a personal loan will adhere to easy-to-meet eligibility criteria and a simple documentation procedure.
However, for borrowing to be successful, individuals must know the reasons for personal loan rejection and how to avoid them.
An unsecured credit option does not require borrowers to pledge any collateral. Hence, the disbursal process for a personal loan is comparatively faster, unlike other credit options. Knowing how the disbursal process for personal loans works will help borrowers make an informed decision regarding the credit option.
In order to make the most out of the credit option, borrowers must know everything about personal loans for used cars. Knowing the ins and outs of the credit option will help borrowers proceed with the application process effortlessly and help them avoid last-minute issues.
Furthermore, while servicing a personal loan, borrowers can check the exclusive pre-approved offers extended by several leading financial institutions on financial products like personal loans, business loans, etc. These offers expedite the loan application process. Intending borrowers can check the pre-approved offers by submitting their names and contact details.
In conclusion
A used car loan extends financial assistance to borrowers, helping them afford a car. However, borrowers can effectively opt for a personal loan depending on the convenience and urgency of funds.
